Turkey 'a growing overseas property market'

Low inflation and house prices are making Turkey a hotspot for overseas property investment, according to Colordarcy.

Maureen Madden, the property investment consultancy's portfolio manager, told the Telegraph that inflation has declined in the country in recent years, while house prices are kept down by the low average income and the "predominantly cash-dominated economy".

However, she stressed that premises are starting to increase in price, thanks in no small part to perceptions that the Turkish economy is set for growth over the coming years.

Another factor counting in Turkey's favour is the fact that it has not adopted the much-troubled euro.

This means its status as a potential investment destination has been largely undamaged by the troubles facing the European single currency, at a time when the economies of other overseas property hotspots like Italy, Portugal and Spain have struggled.

Furthermore, it is becoming easier for foreigners to purchase property in Turkey thanks to the phasing out of the country's reciprocity rule. This piece of regulation prevented overseas residents buying homes in Turkey unless they were from countries in which Turkish citizens were allowed to acquire property.

The appeal of Turkish property is reflected in the popularity of new housing in the capital city Istanbul, where demand is currently running at around 250,000 units per year, Ms Madden explained.

Consequently, much available land in the city is being set aside for large-scale residential developments.

Although property prices in Turkey are currently still lower than in many other overseas markets, this trend may not last long if the latest Knight Frank Global House Price Index is anything to go by.

The report revealed the value of Turkish housing grew by 10.5 per cent year on year in the second quarter of 2012, representing the third highest upturn of any international market. Only Brazil (18.4 per cent) and Austria (11 per cent) were ahead of Turkey in the ranking.